Former Hedge Fund Manager Gets Probation For Galleon Assist

Feb 4 2010 | 12:45pm ET

A former hedge fund manager convicted of insider-trading was sentenced to three years probation today after prosecutors said his cooperation helped bring down the alleged Galleon Group insider-trading ring.

Mark Lenowitz helped lead authorities to David Slaine, identified this week as a government mole whose cooperation—which included wearing a wire—led to the arrests of seven of the 21 people charged in the Galleon case, including two former Galleon employees, Zvi Goffer and Craig Drimal. Slaine himself, who pleaded guilty to fraud charges in December, is a former Galleon employee.

Goffer, Drimal and the five others they were arrested with, three of which have hedge fund ties, have pleaded not guilty. Galleon founder Raj Rajaratnam and former New Castle Partners executive Danielle Chiesi have also denied any wrongdoing. Eight people have pleaded guilty in the case so far.

Lenowitz, who pleaded guilty two years ago, did not wear a wire, prosecutors said. He has been cooperating with authorities for more than two years.

U.S. District Judge Sidney Stein said he had planned to send Lenowitz to prison. But he was convinced of the value of Lenowitz’s cooperation, and instead ordered probation—including six months of home confinement—and the forfeiture of $337,000, as well as 160 hours of community service each year.

Lenowitz, who worked for hedge funds Chelsey Capital and Q Investment Partners, was one of 14 people charged in a 2007 insider-trading case. At the time, it was the largest insider-trading case ever brought by U.S. authorities. Slaine also worked at Chelsey Capital.

Of the 14 people charged in the older case, only Slaine awaits sentencing. All pleaded guilty and most received sentences of probation.


In Depth

Fundraising for Mid-Sized PE Funds: Should You Use a Registered B/D?

Dec 6 2016 | 7:18pm ET

When does a fund sponsor need to use a registered broker/dealer when raising capital...

Lifestyle

Trump Attends 'Villains and Heroes' Costume Party Dressed As...Himself

Dec 5 2016 | 11:16pm ET

U.S. President-elect Donald Trump attended a "Villains and Heroes" costume party...

Guest Contributor

A Hard Look At Your ‘Soft’ Hedge Fund Marketing Information

Dec 8 2016 | 9:03pm ET

Conventional wisdom holds that due diligence examines quantitative as well as qualitative...

 

From the current issue of

Since the inception of Modern Trader, a core editorial theme has centered on the wisdom and power of crowds. Editorial emphasis has focused on companies and projects engaged in the collection and analysis of information. 

AVAILABLE NOW at BARNES & NOBLE

NEWSTAND LOCATOR